Basic Information

Social Contribution

Excluding oil, natural gas, and government sectors, the mandatory social security contribution rates for employment income are as follows:

In the oil and gas industry, social security contribution rates are the same as the standard rates. After a seven-year grace period, the new rates will apply as follows:

Employee contribution: 3%

Employer contribution: 22%

Mandatory Health Insurance

According to the Republic of Azerbaijan's Health Insurance Law, mandatory health insurance has been effective since January 1, 2021. The calculation and payment of mandatory health insurance are as follows:

Unemployment Insurance Contributions (UIC)

Since January 1, 2018, the Unemployment Law has been in effect. According to this law, both employers and employees must contribute 0.5% of the gross monthly salary for unemployment insurance.

Employer contribution: 0.5% of the employee's gross salary

Employee contribution: 0.5% of their own gross salary

Personal Income Tax

Since January 1, 2019, employees in non-oil, non-gas, and non-government sectors will have their monthly income exempt from tax for the next seven years, as follows:

Standard and post-grace-period tax rates for oil, gas, and government sector employees are as follows:

Payroll 

Payroll Cycle

Salaries are paid in local currency, divided into two parts, and disbursed twice a month with intervals not exceeding 16 days.

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No.

Working Time

Standard Working Hours (full time)

Daily working hours shall not exceed 8 hours, and weekly hours shall not exceed 40. The standard workweek is five days with two days off. For a six-day workweek, daily hours must be adjusted to keep the total at 40 hours per week. Daily limits are 7 hours for a 40-hour week, 6 hours for a 36-hour week, and 4 hours for a 24-hour week.

Overtime

Employers cannot require overtime for more than two consecutive days. Daily overtime is limited to 4 hours, or 2 hours in hazardous environments. Overtime cannot be substituted with paid leave or additional rest days.

Overtime Pay

For hourly work: pay must be at least twice the normal wage.  

For piecework: full piece rate plus an additional amount no less than the corresponding hourly wage.

Holidays

Public Holidays

Azerbaijan has 15 public holidays:

January 1-5: New Year (5 days)  

January 20: Martyrs' Day (1 day)  

February 7: Presidential Election Day (1 day)  

March 8: International Women's Day (1 day)  

March 20-26: Novruz Bayram (7 days)  

April 10-12: Eid al-Fitr (3 days)  

May 9: Victory Day (1 day)  

May 28: Republic Day (1 day)  

June 17: National Revival Day (1 day)  

June 16-19: Gurban Bayram (Festival of Sacrifice)  

June 26: Armed Forces Day (1 day)  

November 8: Republic Day of Victory (1 day)  

November 11: National Flag Day (1 day)  

December 31: World Azerbaijanis Solidarity Day (1 day)

Annual Leave

Employees are entitled to a minimum of 21 calendar days of paid annual leave per year, with certain professions eligible for up to 30 days. Leave can be taken after six months of employment and may be split, with each segment being no less than 2 days.

Annual leave is allocated based on the work year, which begins on the employment date and concludes on the same date in the following year. If the work year has not commenced at the time of the leave request, the employee must wait until it begins to take leave.

Seasonal workers generally receive basic leave at the end of the season, accruing at least two days per month worked. Public holidays that fall during the leave period are not counted as leave days and are not compensated.

Additional annual leave is granted based on length of service:

5-10 years: 2 days

10-15 years: 4 days

Over 15 years: 6 days

Employees are entitled to compensation for any unused annual leave.

Sick Leave

Sick leave benefits are deducted from wages and require submission of a medical certificate (electronic versions are acceptable). The employer pays sick leave benefits for the first 14 days, with the remainder covered by state social security.

Sick leave benefits are not provided in the following cases:

Employee has less than 6 months of service

No social security contributions have been made at the company

Deliberate self-harm or falsification of medical certificates

Injury or illness resulting from criminal activity

Court-ordered treatment (except for mental health cases)

Sick leave benefits based on length of service:

Less than 8 years: 60% of wages

8 to 12 years: 80% of wages

More than 12 years: 100% of wages

Maternity Leave

Mothers are entitled to 126 days of paid maternity leave (70 days before delivery and 56 days after). In cases of complications or multiple births, an additional 70 days of leave is provided.

Paternity Leave

The husband is entitled to 14 days of unpaid paternity leave after the wife gives birth.

Parental Leave

Women with children under 2 months can take 56 days of parental leave after maternity leave. Before the child turns 3, either parent or a caregiver can take paid parental leave and receive statutory benefits.

Other Holidays

For managing family and personal affairs, employees may be granted up to 7 days of unpaid leave.

Labor Contract

Labor Contract Type

Labor contracts are divided into fixed-term contracts and permanent contracts.

For fixed-term employment contracts，the duration is agreed upon by both parties. If neither party terminates the contract within one week after its expiration, it is automatically extended for a term equal to the original duration. If the fixed-term contract continues for more than 5 years, it is considered a permanent contract.

Probation Period 

For 6-month fixed-term contracts, the probation period is up to 2 weeks. For other contracts, it is up to 3 weeks. If not specified, no probation period is assumed.

Termination

Notice Period

Probation period: Either party must provide 3 days' written notice.

For permanent employment:

Employee resignation: Requires 1 month's written notice to the employer.

Employer dismissal: Must be based on valid reasons under labor law and supported by reasonable proof.

For layoffs:

1-year contract: At least 2 weeks' notice.

1-5 years' contract: At least 4 weeks' notice.

5-10 years' contract: At least 6 weeks' notice.

Contracts over 10 years: At least 9 weeks' notice.

Severance Pay

In cases of termination due to company bankruptcy or layoffs, severance pay must be provided as follows:

Less than 1 year of service: 1 month’s average salary ; 1 to 5 years of service: At least 1.4 times the average salary ;5 to 10 years of service: At least 1.7 times the average salary; Over 10 years of service: At least 2 times the average salary  

With the employee's consent, the employer may:  

Pay at least 0.5 times the average salary to offset a 2-week notice period Pay at least 0.9 times the average salary to offset a 4-week notice period Pay at least 1.4 times the average salary to offset a 6-week notice period Pay at least 2 times the average salary to offset a 10-week notice period.